Diversification and growth of the Portuguese economy

Defining public policies that promote economic growth is one of the most important issues for a government. Economic theory suggests that economic growth is strongly associated with the division of labour. In this sense, these public policies should focus on products and services where a country has an advantage in specialising.

This study by Fundação Francisco Manuel dos Santos aims precisely to contribute to the definition of Portuguese public policies to promote investment by:

• identifying specific opportunities for diversifying Portugal's productive structure;
• identifying the institutional conditions needed to promote the opportunities identified.

This study seeks first of all to assess whether the association between per capita income growth and the initial economic complexity of each country, identified by previous studies, is maintained when we take into account the specific characteristics of each country. With this goal in mind, the study also seeks to identify opportunity products with the potential to increase Portugal's economic complexity and quantify its economic growth potential.

Secondly, the study seeks to analyse institutional conditions, particularly in terms of public policies for innovation and attracting foreign direct investment, which is necessary for taking advantage of diversification opportunities in the production technologies cluster and the aeronautics, space and defence industries cluster, with the aim of making specific recommendations and not just generically identifying conditions that tend to be favourable to the desired goal.